What does “strategic workforce planning” mean to you? Do you know how to use it to your advantage when growing your company?
According to the Society for Human Resource Management, strategic workforce planning “is the process an organization uses to analyze its workforce and determine the steps it must take to prepare for future staffing needs.”
In other words, it’s the steps you take today that will impact your organization in the future. If you neglect to analyze your current workforce and plan accordingly, you could find yourself scrambling to meet your staffing needs down the road.
The benefits of workforce planning
There are many reasons why workforce planning is critical to the overall health of your organization. Here are some of the top benefits associated with this process.
- Plan for change: Establish key metric benchmarks to ensure that you’re ready for anything that the future brings.
- Improve your recruitment process: For example, use strategic workforce planning to recruit global talent.
- Reduce hiring costs: Make the most of the talent you have to avoid “overhiring.”
- Identify talent gaps: Pinpoint gaps that need to be plugged with new hires.
- Improve retention: You don’t want to lose your top talent—or any talent, for that matter—to other employers. Strategic workforce planning allows you to take key steps in retaining employees.
Without a strategic workforce planning model to guide you, you’ll likely miss out on one or more of these benefits among others.
The strategic workforce planning process
Your approach to the strategic workforce planning process is based largely on your current situation, short- and long-term goals, and the direction your company is headed. There are four steps you can take to implement a plan that suits the individual requirements of your company.
1. The supply analysis
This is an analysis of your company’s current labor supply. How many employees do you have? How do these employees fit within your company’s many departments?
The goal of the supply analysis is to thoroughly review your company as it currently exists. You’re not looking toward the future at this time. You’re only focused on the here and now.
In addition to the current number of employees, make note of details such as:
- The skill set of each employee.
- Workforce demographics.
- Employees belonging to protected classes.
For example, if a large portion of your workforce is nearing retirement age, you can expect the turnover rate to increase in the years to come. Neglecting to plan for this could leave you with a talent shortage as employees begin to retire.
2. The demand analysis
Unlike the supply analysis, the demand analysis is used to forecast your company’s future needs. Use it to answer questions such as:
- Does your current workforce have the skills needed to compete in your industry in the future?
- Are there areas within the company that will require talent reinforcements?
- How will the competitive landscape change and what impact will it have on your company?
Planning for demand today allows you to take immediate and effective action in the future. You’ll know exactly what to do no matter what situation you face.
3. The gap analysis
The gap analysis is designed to compare the supply model and the demand model to determine current and future needs. Some of the most important details to focus on during a gap analysis include:
- Future scenarios that are likely to occur.
- How you’ll approach these scenarios.
- The number of additional employees you’ll need to successfully manage these scenarios.
- The required skill set of these employees.
Ideally, you’ll find that the gap between the supply model and demand model is slim. But even if this is the case, there’s always room for planning for the future.
4. The solution analysis
Speaking of planning for the future, this is where the solution analysis comes into play. It’s geared toward addressing current staffing shortages and future needs through recruiting, training, employee development, staffing, and outsourcing.
It’s not good enough to take the three previous steps. They’ll help you understand your current situation, think about the future, and identify potential challenges, but they don’t solve any problems.
The solution analysis allows you to confidently answer questions such as:
- Do you need to grow your workforce?
- Do you need to trim your workforce?
- Is it time to restructure your organization?
The answers to these questions help you decide which action to take. For instance, if you need to grow your workforce, turn your attention to recruiting. But if you need to restructure your organization, staffing or outsourcing may make more sense.
Global workforce planning and forecasting
With each passing year, more companies realize the benefits of hiring talent from around the world. Gone are the days of scouring the local area for the most qualified employees. The world is now at your fingertips.
Global workforce planning is a subset of strategic workforce planning. Use it to do the following:
- Identify high-growth countries where talent is quickly developing.
- Determine where the best talent is located for each hiring need, such as programming, design, and marketing.
- Implement a plan for overcoming cultural differences.
As you do these things, you can also forecast your future needs and how you’ll approach them.
If global workforce planning is on your mind, Oyster can help you with everything from hiring to paying to managing your remote team. When you take care of your global team, they’ll take care of you!
Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.
Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.